BPCE - 2018 Registration document

4 ACTIVITIES AND FINANCIAL INFORMATION 2018 Outlook for Groupe BPCE

DEFINITIONS AND NOTES ON METHODOLOGY Net banking income Net interest income excluding home savings is calculated on the basis of interest earned on transactions with customers, excluding net interest on centralized savings (Livret A, LDD, LEL) and the change in the home savings provision. Net interest on centralized savings is recorded under fee and commission income. Operating expenses Operating expenses are the aggregation of operating expenses as presented in the registration document (Note 4.7 to the Groupe BPCE consolidated financial statements) and “Depreciation, amortization and impairment of property, plant and equipment and intangible assets.” Cost of risk Cost of risk is expressed in basis points and measures the level of risk by business division, as a percent of the volume of loan outstandings. It is calculated by dividing the net allowance for credit risk over the period by gross customer loan outstandings at the start of the period. The following restatements were carried out for the transition from accounting capital to loan outstandings and customer savings & deposits: customer savings and deposits: outstandings exclude debt ● securities (certificates of deposit and savings bonds); loan outstandings: outstandings exclude equivalents of loans and ● receivables due from customers and other financial activity equivalents. Solvency Common Equity Tier 1 is determined in accordance with the applicable CRR/CRD IV rules; non phased-in capital is presented without applying phase-in measures. – Additional Tier 1 capital includes subordinated debt issues which have become ineligible for deferred tax assets, capped at the phase-out rate in force. – The leverage ratio is calculated using the rules of the Delegated Act published by the European Commission on October 10, 2014, without phase-in arrangements. Securities financing operations carried out with clearing houses are offset on the basis of the criteria set forth in IAS 32, without consideration of maturity and currency criteria. Subsequent to the ruling of the European Court of Justice on July 13, 2018, Groupe BPCE once again applied for ECB approval to exclude centralized regulated savings from the calculation of the ratio’s denominator. Loan outstandings, customer savings and deposits

sheet published on November 9, 2015, “Principles on Loss-Absorbing and Recapitalisation Capacity of G-SIBs in Resolution.” This amount comprises the following four items: Common Equity Tier 1 capital, in accordance with applicable ● CRR/CRD IV rules; additional Tier 1 capital, in accordance with applicable CRR/CRD IV ● rules; tier 2 capital, in accordance with applicable CRR/CRD IV rules; ● subordinated debt not recognized in the above categories, with a ● residual maturity of more than 1 year, i.e. : the share of AT1 instruments not recognized in capital ( i.e. taken - in phase-out), the share of the prudential discount on Tier 2 instruments with a - residual maturity of more than 1 year, the nominal amount of senior non preferred debt with a maturity - of more than 1 year. Eligible amounts vary somewhat from the amounts included in the numerator of solvency ratios; these eligible amounts are determined in accordance with the principles of the FSB term sheet of November 9, 2015. central bank-eligible assets: ECB-eligible securities not eligible for ● the LCR, taken for their ECB valuation (after ECB haircut), securities held (securitization and covered bonds) that are available and ECB-eligible, taken for their ECB valuation (after ECB haircut) and private debt available and eligible for central bank funding (ECB and Federal Reserve), net of central bank funding; LCR eligible assets comprising the Group’s LCR reserve taken for ● their LCR valuation; liquid assets placed with central banks (ECB and the Federal ● Reserve), net of US MMF (Money Market Funds) deposits, plus fiat money. Short-term funding comprises funding with an initial maturity of less than or equal to 1 year, and the short-term maturities of medium-/long-term debt comprise debt with an initial maturity of more than 1 year maturing within the next 12 months. The Group’s LTD (Loan-to-Deposit) ratio is calculated by dividing the numerator (loans to customers and centralized regulated savings) by the denominator (customer deposits). The scope of the calculation excludes Compagnie de Financement Foncier (the Group’s “Société de Crédit Foncier”, a French covered bond issuer). These items are taken from the Group’s accounting balance sheet after the equity-method recognition of insurance undertakings. The following adjustments were made to customer deposits: – Addition of issues placed by the Banque Populaire and Caisse d’Epargne networks with customers, and certain transactions carried out with counterparties considered equivalent to customer deposits – Removal of short-term deposits by certain financial customers collected by Natixis in its brokerage activities. Liquidity Total liquidity reserves include:

Total Loss Absorption Capacity

The amount of liabilities eligible for the TLAC numerator is determined in accordance with our interpretation of the FSB term

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Registration document 2018